--------------------------------------------------------------------------------



                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
(Mark One)
   (X)     ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15 (D) OF THE  SECURITIES
           EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997
                                    OR
   ( )     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
           EXCHANGE ACT OF 1934 - For the Transition period from ______ to ____
                                  -------------

                         Commission File Number: 0-21604
                         -------------------------------

             Common Goal Health Care Pension and Income Fund L.P. II
        (Exact name of small business issuer as specified in its charter)

            Delaware                                            36-3644837
   (State or other Jurisdiction                             (I.R.S. Employer
of incorporation or organization)                         Identification Number)

                                 215 Main Street
                            Penn Yan, New York 14527
                            ------------------------
               (Address of principal executive offices) (Zip Code)

                                 (315) 536-5985
                                 --------------
                           (Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act:  None
Securities registered under Section 12(g) of the Exchange Act:  None

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.        YES [X]  NO [ ]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this Form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements,  incorporated  by  reference  in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

Isssuer's revenues for the fiscal year ended December 31, 1997 were $214,266.

The aggregate sales price of the units of Limited  Partnership  Interest held by
non-affiliates  of the  Registrant  as of March  31,  1998 was  $2,113,825  (488
investors).  As of March 31,  1998,  there was no market for these  Units and no
market is expected to develop.  The  aggregate  sales price is  accordingly  not
necessarily indicative of the price at which these Units would trade.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Prospectus of the Registrant  dated February 20, 1987, and filed
pursuant to Rule 424(b) and Rule 424(c)  under the  Securities  Act of 1933,  as
amended,  are  incorporated  by reference into Part III of this Annual Report on
Form 10-KSB.
<PAGE>
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
                                                                                           Page
 
<S>      <C>          <C>                                                                   <C>
PART I
         Item 1.      Description of Business.................................................1
         Item 2.      Description of Property................................................13
         Item 3.      Legal Proceedings......................................................13
         Item 4.      Submission of Matters to a Vote of Security Holders....................13

 PART II
         Item 5.      Market for Units of Limited Partnership Interest and Related
                      Security Holder Matters................................................14
         Item 6.      Managements Discussion and Analysis or Plan of Operation...............14
         Item 7.      Financial Statements...................................................17
         Item 8.      Changes in and Disagreements with Accountants on Accounting
                      and Financial Disclosure...............................................17

 PART III
         Item 9.      Directors, Executive Officers, Promoters and Control Persons,
                      Compliance with Section 16(a) of the Exchange Act......................18
         Item 10.     Executive Compensation.................................................21
         Item 11.     Security Ownership of Certain Beneficial Owners and Management.........21
         Item 12.     Certain Relationships and Related Transactions.........................21

 PART IV
         Item 13.     Exhibits and Reports on Form 8-K.......................................23

FINANCIAL STATEMENTS........................................................................F-1

SIGNATURES
</TABLE>


                                       (i)
<PAGE>
                                     PART I

Item 1.       Description of Business.

General.
--------

      Common   Goal   Health   Care   Pension  and  Income  Fund  L.P.  II  (the
"Partnership")  was organized on May 9, 1989 as a limited  partnership under the
Delaware  Revised Uniform Limited  Partnership  Act. The  Partnership's  general
partners  are Common  Goal  Capital  Group,  Inc.  II  ("Common  Goal II" or the
"Managing  General  Partner")  and  Common  Goal  Limited  Partnership  II  (the
"Associate  General  Partner")  (collectively,  the  "General  Partners").  With
limited  exceptions,  Common Goal II has exclusive  control over the business of
the Partnership,  including the right to manage the  Partnership's  assets.  The
Partnership   commenced  operations  on  July  2,  1990  after  having  accepted
subscriptions  for more than the  requisite  number of 117,650  units of limited
partnership  interest (the  "Units") in a public  offering  registered  with the
Securities  and Exchange  Commission on Form S-11 (the "Public  Offering").  The
Partnership  raised a total of  $5,221,160  through  January  11,  1992 when the
Public Offering terminated.

      The Partnership's  primary business is to invest in or make mortgage loans
which to date have been secured by junior  mortgages or deeds of trust (and may,
in the future include first mortgages or deeds of trust,  but not wrap-around or
other liens which are more junior  than second  positions)  on fee or  leasehold
interests in health  care-related  real estate,  including  properties  owned or
acquired by affiliated  borrowers,  or other collateral,  including interests in
borrowers  satisfactory to the Managing General Partner (the "Mortgage  Loans").
To a lesser  extent,  the  Partnership  may make  Mortgage  Loans  through joint
ventures formed as general  partnerships  and may make Mortgage Loans secured by
interests  in  partnerships,   corporate  stock,  joint  ventures  or  leasehold
interests; provided, however, that the aggregate of such Mortgage Loans shall be
less  than  45%  of  the  aggregate  value  of  the  Partnership's  assets.  The
Partnership  may not make  Mortgage  Loans in  excess of  $4,000,000  to any one
entity. In addition, the Partnership will not make a Mortgage Loan if the amount
of the aggregate mortgage indebtedness exceeds 90% of the appraised value of the
property  underlying the Mortgage Loan. The Partnership  does not intend to make
Mortgage  Loans on  properties  with respect to which the debt service  coverage
ratio is less than 1.3 to 1,  unless  other  underwriting  criteria  support the
Mortgage Loan.  Underwriting  criteria which may be considered  include  whether
loan-to-value  ratios are less than 85%, whether there is additional  collateral
securing  the Mortgage  Loan,  whether  guarantees  of repayment or other credit
enhancements  have been provided and such other factors as the Managing  General
Partner may deem  appropriate.  Additionally,  the Partnership will require that
any Mortgage Loan to an Affiliate provide the following:

      (a)     Inclusion of a provision  making the Mortgage Loan a full recourse
              obligation of the Affiliate until the debt service coverage is not
              less than 1.3 to 1 for at least 12 consecutive months;

                                        1
<PAGE>
      (b)     Subordination of management fees payable to facility managers;

      (c)     Subordination  of mortgage  servicing  fees payable to Common Goal
              Mortgage Company;

      (d)     With respect to Mortgage  Loans of which the proceeds will be used
              for   renovations,   approval  by  the  applicable  state  medical
              reimbursement agency of the renovations prior to funding;

      (e)     Approval by a majority of the Board of  Directors  of the Managing
              General Partner (including all Independent Directors);

      (f)     Receipt of a fairness opinion from the Independent Advisor;

      (g)     Inclusion of a yield maintenance provision for prepayments; and

      (h)     Delivery by  independent  accountants  of a report to the Board of
              Directors  evaluating  certain parameters of the proposed Mortgage
              Loan.

The Partnership has adhered to these  requirements in making its Mortgage Loans.
Mortgage  Loans  which  are  deemed  to have  substantially  the same  risks and
potential  rewards  as  an  owner  of  an  underlying   property  by  virtue  of
characteristics  such as participation in expected residual profits or where the
lender provided all or substantially all necessary funds to acquire the property
(such that the  borrower  has little or no equity  therein),  must be treated as
investments in the underlying properties for financial accounting purposes.  All
Mortgage Loans previously  characterized as investments in underlying properties
were paid off in April 1995, and therefore, at December 31, 1997, 1996 and 1995,
there were no Mortgage Loans treated as  investments  in underlying  properties.
The  Partnership  treats its Mortgage Loans as mortgage loans for federal income
tax purposes. See "Item 7. Financial Statements".

      The existing Mortgage Loans are, and future Mortgage Loans are expected to
be, secured by nursing homes (characterized as private institutions that provide
fundamental  health and  rehabilitation  services  for the aged and the infirm).
Mortgage   Loans   also  may  be  secured  by   intermediate   care   facilities
(characterized  as private  institutions that serve patients with lesser degrees
of disability).  For further  information  concerning the Partnership's  present
investments in Mortgage Loans, see "Existing Mortgage Loans" below.

      The Partnership's  objectives in making  investments of the type described
above are:  (i) to  preserve  and  protect the  Partnership's  capital;  (ii) to
provide quarterly distributions from investment income; and (iii) to provide for
potential long-term  appreciation of its Mortgage Loan investments,  principally
through participations payable at maturity of the Mortgage Loan or upon the sale
or  refinancing  of the  underlying  property  (the  "Participations").  Because
Participations  in  facility  appreciation  are paid  only  upon  maturity  of a
Mortgage Loan or a sale of the underlying facility, increased cash distributions
as a result of such Participations are not expected

                                        2
<PAGE>
to  commence  for a period of five years or more from the date that the  related
Mortgage Loan is made, if at all. It is not an objective of the  Partnership  to
provide tax-sheltered income.

      Funds held  pending  investment  in Mortgage  Loans may be invested by the
Partnership,  at the direction of the Managing General Partner, in United States
government securities, certificates of deposit of United States banks with a net
worth of at least $20,000,000,  repurchase agreements covering the securities of
the United States  government or governmental  agencies,  bankers'  acceptances,
commercial paper rated A-1, Prime-1 or better by Standard and Poor's Corporation
or Moody's  Investors  Service,  Inc.,  respectively,  money market funds having
assets in excess of  $100,000,000,  interest-bearing  time deposits in banks and
thrift institutions or any combination of these investments.

      The  Partnership  is  conducting  and  intends to  continue to conduct its
operations so that it will not become subject to regulation under the Investment
Company Act of 1940. Generally,  the term "investment company" might include the
Partnership if, after a one-year period,  the  Partnership,  among other things,
were to be  engaged  primarily,  or were to hold  itself  out as  being  engaged
primarily, or were to propose to engage primarily, in the business of investing,
reinvesting or trading in securities, or if it were to have more than 40% of its
total assets, excluding cash and government securities,  invested in "investment
securities" as that term is defined in the  Investment  Company Act of 1940. The
Partnership does not currently meet this test.

      Basic Policies for Mortgage Loan  Investments.  In making  Mortgage Loans,
the Managing General Partner  considers such relevant factors as (1) the quality
and experience of the management operating the facility; (2) the geographic area
and type of facility  (nursing home or intermediate  care or a mix of both); (3)
the location,  construction,  quality, condition and design of the facility; (4)
the  current  and  anticipated  cash flow from the  facility  and its ability to
sufficiently  cover debt service  (including the  Partnership's  Mortgage Loan),
meet operational  needs and generate  revenues  sufficient to provide  investors
with  significant   Additional   Interest,   as  defined  in  the  Partnership's
prospectus,  and potential  value to the  Partnership's  Participation;  (5) the
growth,  tax and regulatory  environment of the community in which a facility is
located;  (6) occupancy and demand for similar health care facilities with which
the  facility  would  compete;  and (7) the mix of private  and  government  pay
patients.  As a general rule,  the  Partnership  will not make Mortgage Loans on
facilities  which are located in states  which do not  restrict  the issuance of
certificates of need, unless supported by additional  factors,  such as borrower
guarantees.  Further, it is intended that Mortgage Loans will be made in various
geographic  locations  in order to achieve  portfolio  diversification,  thereby
minimizing potential effects of changes in local economic conditions and similar
risks.

      Types of Mortgage  Loans.  The  Partnership  makes  Mortgage  Loans on fee
interests (or other beneficial interest essentially  equivalent to a mortgage on
real property).  All real estate underlying Mortgage Loans is used in the health
care industry,  particularly  real estate used as nursing home and  intermediate
care  facilities.  The Partnership  will not make  construction  loans except in
connection with renovation or additions to existing facilities.  The Partnership
may also
                                        3
<PAGE>
make Mortgage Loans to enable borrowers to acquire newly constructed  properties
and may commit to invest in or make  Mortgage  Loans with respect to  properties
under  construction  or prior to  construction,  provided any such commitment is
subject to satisfactory  completion of construction (and licensure by regulatory
agencies,  as applicable) by a specified  date.  However,  in no event will such
construction  loans,  other than those made in connection  with  renovations  or
additions  to existing  facilities,  in the  aggregate,  exceed 20% of the gross
proceeds  received from the Public Offering.  As with the Mortgage Loans made to
date, the Partnership  expects that any future Mortgage Loans will have terms of
not less than  three nor more than ten  years.  Mortgage  Loans of five years or
less may be subject to one or more extensions,  which together with the original
loan term will not exceed ten years in duration, with all principal and deferred
interest,  if any,  payable  upon  maturity of the Mortgage  Loans.  The General
Partners  do not,  however,  generally  intend to  structure  Mortgage  Loans to
provide for deferred  interest  except when it is payable in lieu of  additional
interest and/or participations.

     Federal  Income Taxes.  The  Partnership  is not subject to federal  income
taxes as the  liability  for such taxes is that of the partners  rather than the
Partnership.

      Other  Operating  and  Investment  Policies.  Affiliates  of  the  General
Partners  (including  partners,  officers and directors  investing for their own
account or that of others)  have  formed,  and may in the future  form,  limited
partnerships or other entities with the same investment  objectives and policies
as the Partnership,  which may compete with the Partnership for investments. The
Partnership's  amended and restated  agreement of limited  partnership  provides
that neither the General  Partners nor their  Affiliates  have any obligation to
present any particular  investment  opportunity to the  Partnership,  subject to
certain limitations set forth below.

      The General Partners believe that conflicts of interest will arise only if
the Partnership is seeking  investments at a time when an Affiliate with similar
investment  objectives is seeking to make Mortgage  Loans.  In such an event, if
affiliated  entities have similar  investment  objectives  and policies and have
funds  available  at the same  time as the  Partnership,  the  Managing  General
Partner  will review the  investment  portfolio of each entity and will make the
investment on the basis of such factors,  among others,  as size of  investment,
anticipated cash flow, yield,  portfolio  diversification,  type and location of
the property on which the Mortgage Loan will be made,  proposed loan terms,  the
amount of funds  available  and the length of time the funds of each entity have
been available, as further described below.
      The Managing  General  Partner  will  attempt to resolve any  conflicts of
interest  between  the  Partnership  and  others by  exercising  the good  faith
required of fiduciaries. The Managing General Partner believes that generally it
will be able to resolve  conflicts on an equitable  basis and will adhere to the
following  criteria in determining  whether the  Partnership or one of the other
entities with which it or its  Affiliates  have a  relationship  or  obligation,
should seek to make a particular  Mortgage  Loan:  (i) whether the cash required
for the  particular  Mortgage Loan is more or less than the amount that would be
appropriate for that entity to commit to an investment;  (ii) whether the nature
of the potential cash flow to be derived from the particular  Mortgage Loan will
conform with that entity's investment objectives; (iii) whether that entity

                                        4
<PAGE>
already has  Mortgage  Loans with the same  borrower;  (iv) whether the Mortgage
Loan would satisfy that entity's  objective of geographic  diversification;  (v)
whether the Mortgage  Loan can be  structured  to meet that  entity's  principal
investment  objectives;  (vi) whether the Mortgage  Loan is being  acquired in a
transaction  together with other Mortgage Loans not suitable for  acquisition by
that  entity;  (vii) the  estimated  income tax  effects,  if any, on the entity
resulting  from the  proposed  structure of the  Mortgage  Loan;  and (viii) the
length of time since  that  entity has made a  Mortgage  Loan  investment.  Such
conflicts will be resolved in the best judgment of the Managing General Partner.
If, based on the foregoing  criteria,  the Managing  General Partner  determines
that the making of a particular  Mortgage Loan is equally  appropriate  for more
than one entity  affiliated  with the General  Partners,  then the Mortgage Loan
will be made by the  entity  which was  formed  first or which has had its funds
available  for  investment  for the longest  period as determined by the General
Partners in their  discretion.  The principal  purpose of these provisions is to
enable the General Partners and their Affiliates, while arranging the investment
portfolios of the  Partnership  and any affiliated  entities which might then be
seeking suitable  Mortgage Loans and other  investments,  to select the Mortgage
Loan or other  investment  which they believe is most suitable for investment by
the Partnership or by any such other affiliated entity. The foregoing provisions
are not intended to relieve the General Partners of their fiduciary  obligations
to the  Partnership.  The General  Partners and their  Affiliates  will have the
right to make an investment  after the  Partnership  has declined an investment,
even if the Partnership still has uncommitted funds available.
      In connection  therewith,  Common Goal Health Care Participating  Mortgage
Fund L.P. ("Common Goal I"), an affiliated, publicly-offered limited partnership
with  investment  objectives  that are  substantially  identical to those of the
Partnership,  has  substantially  completed  acquisition of its initial mortgage
loan  portfolio.  Should  Common Goal I determine  to make funds  available  for
reinvestment  in additional  Mortgage  Loans,  Common Goal I could have priority
over the  Partnership  in  acquiring  or making the next  Mortgage  Loan  deemed
suitable  for its  investment  objectives,  subject to the  conflict  resolution
policies  set  forth  above.  In the  event  that  Common  Goal I is  unable  to
consummate  additional mortgage loans, the Partnership will have the opportunity
to make those loans.

Existing Mortgage Loans.
------------------------

The principal balances  outstanding for mortgage loan receivables as of December
31, 1997 were as follows:

      Joint Venture Loan                                            $50,590
      St. Catherine's of Tiffin                51,500
      St. Catherine's of Bloomville                                  36,000
      St. Catherine's of Fostoria                                   102,000
      St. Catherine's of Findlay                                    142,500
      St. Catherine's of Washington Court House                      68,000
      St. Catherine's Care Centers                                  754,700
                                                                 ----------
                                                                 $1,205,290
                                                                 ==========

                                        5
<PAGE>
      Joint Venture Loan. In 1989, the Partnership  entered into a joint venture
agreement with Common Goal Health Care Participating Mortgage Fund, L.P. ("CGI")
to make a mortgage loan (the "Joint Venture Loan") to two unaffiliated Tennessee
limited  partnerships  (the  "Borrowers").  The Joint Venture Loan was funded on
August 1, 1990, in the original  principal  amount of $3,430,114  ($3,400,114 at
December  31, 1991) with Common Goal I  contributing  100% of such amount to the
joint  venture  at that time.  Although  the  Partnership  had the right to, and
originally  expected to, contribute up to 50% of the amount of the Joint Venture
Loan  ($1,715,057),  sales of  Partnership  Units  occurred at a lower rate than
originally  projected.  Accordingly,  through December 31, 1993, the Partnership
had  contributed  $95,600 to the joint venture.  The Joint Venture Loan requires
payment of Basic  Interest at a rate of 13.7% per annum.  The loan also requires
payment of  additional  interest at a rate of 1.95% of gross  revenues  from the
collateral  securing the Joint Venture Loan in excess of  $1,694,000  per annum.
The loan also provides for payment of a participation  equal to 30% of the first
$1,000,000  of increase in the fair market  value (or gross sales  price) of the
Facilities  over  aggregate  secured  indebtedness  (including the Joint Venture
Loan) as of the date of funding of the Joint Venture Loan and 17% of the balance
of any such increase.  The participation would be payable upon sale, refinancing
of a senior mortgage loan or at maturity of the Joint Venture Loan with the fair
market values to be  determined at that time.  The Joint Venture Loan is secured
by a second mortgage on a 100-bed skilled and  intermediate  care facility owned
by one of the  Borrowers  as  well  as a  collateral  assignment  of 100% of the
general partners' and limited partners' interest in each Borrower.  The security
interest was taken in the Borrowers  insofar as the retirement and assisted care
facility owned by the other  Borrower is subject to a HUD  regulatory  agreement
which prohibits  junior  encumbrances.  On November 3, 1993, the Borrower paid a
total of $1,746,790 in a restructuring of the Joint Venture Loan. Of the $52,314
allocated to the  Partnership,  $45,010 was applied to  principal  and $4,501 to
Prepayment  Penalty.  The amount  allocated  includes  $2,250 from a  negotiated
refinance fee and Gross Revenue,  Basic  Interest and Additional  Interest which
were taken as set forth in the loan  documents.  The CGI  balance  has also been
paid down to  $1,567,664.  In connection  with the  repayment of principal,  the
Partnerships agreed to release the mortgage on the skilled care and intermediate
care facility.  The Partnership's  principal balance as of December 31, 1997 was
$50,590.  The entire principal balance is due at the maturity date of January 1,
2000.

      At December  31,  1997,  the loan was current as to regular  interest  and
annual gross revenue interest.

      St.  Catherine's  Loans.  The  Partnership  made and funded three mortgage
loans to affiliated entities (the "St.  Catherine's  Loans").  The Partnership's
affiliation with these entities is a result of the President and Chief Executive
Officer of the Managing  General  Partner  also serving as the  President of the
entities  receiving the loans. As a result of the refinancing of the senior debt
secured  by the  St.  Catherine's,  Court  House  and  Findlay  facilities,  the
Partnership's  mortgage loans for these same facilities were refinanced on April
13, 1995 and the outstanding principal and Additional Interest were subsequently
paid off. The refinancing of the senior debt did not provide sufficient proceeds
to allow payment in cash of the participations  owing under the St. Catherine's,
Court House and Findlay Loans (the "SC Participations") in the total amount of

                                        6
<PAGE>
$840,500.  The St. Catherine's borrowers paid the SC Participations  through (i)
the issuance of notes in the total amount of $400,000  bearing an interest  rate
of 11.00% per annum (a)  maturing on the earlier of the sale or  refinancing  of
the Tiffin, Bloomville,  Fostoria, Washington Court House and Findlay Facilities
(the "SC  Facilities")  or the maturity of the  refinanced  senior debt (August,
2000)  and  (b)   cross-collateralized  by  second  mortgage  liens  on  the  SC
Facilities;  and (ii) the  issuance of a  contingent  payment  obligation  by St
Catherine's of Seneca,  Inc. in the amount of $202,500 and a contingent  payment
obligation  by St  Catherine's  Care Centers of Fostoria,  Inc. in the amount of
$238,000 (collectively, the "CPOs").

      The  CPOs  bear  interest  at an  annual  rate  of  11.00%,  which  is due
quarterly,  and  mature  on the  earlier  of the sale or  refinancing  of the SC
Facilities or the maturity of the senior debt with South Trust  (August,  2000).
The CPOs provide that interest is payable on a current  basis  provided that the
debt service  coverage ratios on each of the SC Facilities is 1.2 to 1.0. In the
event these debt service coverage ratios are not maintained,  the interest shall
accrue until the debt service coverage ratio is at least 1.2 to 1.0 or maturity.
The CPOs further  provide that principal is payable only to the extent that upon
a resale or refinancing of the SC Facilities,  there are sufficient  proceeds to
repay the senior debt and the amounts  owing under the CPOs.  The CPOs are being
assumed by an affiliated  entity,  Will Care of Ohio, Inc., and will be secured,
to the extent they become  payable and are not paid, by a pledge of 30 shares of
St. Catherine's of Seneca, Inc. common stock.

      In accordance  with FASB  Statement of Standards No. 66,  "Accounting  for
Sales of Real Estate", the $840,500 participation cannot be recognized as income
at this time. The Partnership has recorded $400,000 of the participation amount,
related to the mortgage loan receivable,  as Deferred Revenue,  and the interest
thereon will be recognized as it is earned.  Due to the contingent nature of the
$440,500 in  participation  income due to the Partnership  related to the CPO'S,
such  amount  has not  been  recorded  as an asset  of the  Partnership  and the
participation  income and interest  earned on the CPO's will be recognized  only
when received.

      On March 13, 1997 the Managing General Partner approved a loan of $425,000
to St.  Catherine's Care Center of Tiffin,  Inc., St. Catherine's Care Center of
Bloomville,  Inc., St.  Catherine's Care Center of Washington Court House, Inc.,
St. Catherine's Care Center of Fostoria, Inc. and St. Catherine's Care Center of
Findlay, Inc.,  (collectively,  "St Catherine's Care Centers") affiliates of the
Managing  General  Partner and to be secured by mortgages on the real properties
owned by each of the foregoing,  said  mortgages  being  subordinated  to senior
indebtedness  in the amount of $10,650,000  held by South Trust Bank of Alabama,
N.A. and  indebtedness  of the  Partnership in the amount of $400,000.  The loan
will bear interest at the rate of 13% per annum and will mature August 31, 2000.
The Partnership funded this $425,000 loan on April 10, 1997. On November 3, 1997
the Managing  General  Partner  approved an  additional  loan of $425,000 to St.
Catherine's Care Centers. As of December 31, 1997 the loan balance was $724,700.

                                        7
<PAGE>
      The following chart provides  certain summary  information with respect to
the Partnership's Mortgage Loans.
<TABLE>
<CAPTION>

                          Common Goal II Mortgage Loans

                                                                                                   St. Catherine's
                         Joint Venture        St. Catherine's   St. Catherine's  St. Catherine's   of Washington    St. Catherine's
                           Loan (1)             of Tiffin        of Bloomville     of Fostoria      Court House       of Findlay
                           --------             ---------        -------------     -----------      -----------       ----------
<S>                      <C>                  <C>               <C>              <C>               <C>              <C>        
Date of Loan             August 1, 1990       April 13, 1995    April 13, 1995   April 13, 1995    April 13, 1995   April 13, 1995
Agreement

Type of Loan             Collateral Assign-   Second Mort-      Second Mort-     Second Mort-      Second Mort-     Second Mort-
                         ment of Interest in  gage on one       gage on one      gage on one       gage on one      gage on two
                         one Facility (2)     facility          facility         facility          facility         facilities

Maximum Note
Amount                   $1,618,254 (1)       $51,500           $36,000          $102,000          $68,000          $142,500

Current Principal
Amount Outstanding
as of Dec. 31, 1997      $50,590              $51,500           $36,000           $102,000           $68,000           $142,500

Interest Rate            13.70% (3)           11.00%(4)         11.0%(4)         11.0%(4)          11.0%(4)         11.0%(4)

Maturity                 January 1, 2000      April 30, 2000    April 30, 2000   April 30, 2000    April 30, 2000   April 30, 2000

Type of Property/        100-bed skilled care 44-bed nursing    30-bed nursing   102-bed nurs-     50-bed nursing   40-bed and 60-
Location of Property     and intermediate     home in Tiffin,   home in          ing home in       home in Wash-    bed nursing
Securing Loan            care facility in     OH                Bloomville,      Fostoria, OH      ington Court     home in
                         Honeybrook, PA (2)                     OH                                 House, OH        Findlay, OH

Origination Fee
Paid to an Affiliate
(Paid by Borrower)       $101,900 (1)         None              None             None              None             None

Relationship to
Partnership              Non-Affiliate        Affiliate         Affiliate        Affiliate         Affiliate        Affiliate
______________________
<FN>
(1)  Pursuant  to the terms of the Joint  Venture,  the  Partnership  originally
     contributed  $95,600 to the Joint Venture in connection  with a loan in the
     original principal amount of $3,430,114.  The remaining portion of the note
     was funded by Common  Goal  Health Care  Participating  Mortgage  Fund L.P.
     ("CGI").  On March 29, 1993, CGI received a principal paydown in the amount
     of  $70,000.  On November 3, 1993,  both CGI and the  Partnership  received
     principal  paydowns in conjunction  with a  restructuring  of the Loan. The
     balance of the Joint Venture Loan  attributable  to the  Partnership  as of
     December 31, 1997 was $50,590.

(2)  The Joint Venture Loan is also secured by collateral assignments of 100% of
     the general partners and limited partners'  interest in each Borrower.  The
     security interest was taken
                                        8

<PAGE>
      in the Borrowers  insofar as a retirement and assisted care facility owned
      by the Borrowers is subject to a HUD regulatory  agreement which prohibits
      junior encumbrances on the facility.

(3)   In addition  to Basic  Interest of 13.7%,  this loan  requires  payment of
      additional  interest at a rate of 1.95% of the increase in gross  revenues
      from the  collateral  securing  the  Joint  Venture  loan  over the sum of
      $1,694,000  per annum payable in full within 45 days after the end of such
      fiscal year. The loan also requires additional interest in an amount equal
      to 30% of the first $1,000,000 of increase in the fair market value of the
      collateral  securing  the Joint  Venture Loan over its  aggregate  secured
      indebtedness  and 17% of the  balance  of any  such  increase  in the fair
      market value of such facilities in excess of $1,000,000 over the aggregate
      secured indebtedness.

(4)   Interest on the affiliated St. Catherine's  Mortgage Loans is at a rate of
      11% per annum,  calculated on a 365-day year for the actual number of days
      lapsed, and paid quarterly.

</FN>
</TABLE>
                                        9
<PAGE>
Partnership Allocation of Income and Loss and Distribution.
-----------------------------------------------------------

      Net  Income  and  Net  Loss.   Net  income   (except  with  respect  to  a
"Disposition",  which includes any  Partnership  transaction not in the ordinary
course of its business, including, without limitation,  collections of principal
payments,  equity participation  payments,  prepayments,  prepayment  penalties,
sales,  exchanges,  foreclosures or other dispositions of Mortgage Loans held by
the Partnership,  recoveries of damage awards and insurance proceeds (other than
the receipt of subscriptions  for Units, all forms of interest payments when due
on Mortgage Loans or business or rental  interruption  insurance  proceeds)) and
net loss of the Partnership is allocated  97.5% to Limited  Partners and 2.5% to
the General  Partners.  Net income arising from a Disposition is allocated 97.5%
to  Limited  Partners  and 2.5% to the  General  Partners  to the  extent of any
negative balances in the capital accounts of the Limited Partners, and then 100%
to  Limited  Partners  in an amount  necessary  to bring the  Limited  Partners'
capital  accounts up to an amount equal to their Original  Contributions,  which
means  the  amount of $10.00  for each  Unit  less the  return of any  amount of
uninvested  funds  returned,  as  defined  in the  prospectus,  plus  the  11.5%
preferred cumulative return thereon (less previous  distributions to the Limited
Partners  in  payment  of such  amounts).  The  remainder  of such net income is
allocated 85% to the Limited Partners and 15% to the General Partners.

      Distributions of Cash From Operations. Distributions of Adjusted Cash From
Operations,  defined as all receipts of interest payments on Mortgage Loans less
cash receipts used to pay operating  expenses and to repurchase  any Units (Cash
Flow) less any  amount  set aside for the  restoration  or  creation  of working
capital reserves,  are distributed 97.5% to the Limited Partners and 2.5% to the
General Partners, and are apportioned quarterly among Limited Partners of record
as of the record date declared  within 30 days after the end of each quarter and
will be paid quarterly.  No  distributions of Adjusted Cash From Operations with
respect  to any  calendar  year  are  made to the  General  Partners  until  the
following occurs:

              First,  distributions  to the  Limited  Partners  equal  to the 9%
      annual  cumulative  return on their  Adjusted  Contributions,  defined  as
      Original  Contributions  attributable  to a Unit,  reduced by the total of
      cash  distributed  from  Disposition  Proceeds  and from  working  capital
      reserves,  for such year (plus any amounts  accrued from prior years) have
      been made to the Limited Partners; and

              Second, payment of all previously subordinated management fees, if
      any, have been made.

      Thereafter,  all previously  subordinated  amounts  payable to the General
Partners  with  respect  to their 2.5%  interest  are paid in full to the extent
funds  are  available,  and if not  available,  are  deferred  and  paid  out of
Disposition  Proceeds,  defined as  receipts  from  Dispositions  net of related
expenses,  amounts  necessary  for the payment of debts and  obligations  of the
Partnership  and  any  amount  set  aside  for  working  capital  reserves.  The
Partnership has been making  distributions  to the Limited Partners in excess of
the 9% annual cumulative return on Adjusted Contributions, with the exception of
the four distributions made during the period October 5,

                                       10
<PAGE>
1994 to October 5, 1995, when the annual  cumulative return was reduced to 7.25%
as  discussed  in "Item  6.  Management's  Discussion  and  Analysis  or Plan of
Operation."

      Distributions  of Disposition  Proceeds.  The Managing General Partner has
the right to reinvest or distribute all Disposition  Proceeds  received  through
the second  anniversary  of the final closing date and may reinvest  disposition
proceeds  as  necessary  thereafter  to avoid  classification  as an  investment
company under the Investment Company Act of 1940. Non- liquidating distributions
of  Disposition  Proceeds are  distributed  in the following  order of priority,
except as otherwise required by law:

              First,  100% to the Limited  Partners  until the Limited  Partners
      have  received  an amount  which,  when  added to prior  distributions  of
      Disposition Proceeds and cash from reserves attributable  thereto,  equals
      the Original Contributions of the Limited Partners;

              Second,  100% to the Limited  Partners until each Limited  Partner
      has received an amount  which,  when added to all prior  distributions  to
      Limited  Partners  from all  sources  (including  prior  distributions  in
      satisfaction   of  the  9%  annual   cumulative   return   but   excluding
      distributions  pursuant  to above),  equals the 11.5% per annum  preferred
      cumulative  return on their Adjusted  Contributions,  (calculated from the
      first day of the calendar quarter  succeeding the quarter in which Capital
      Contributions are received);

              Third, 100% to the General Partners until they have been paid 100%
      of the  subordinated  portion,  if any, of (a) the management fee, if any,
      and then (b) their 2.5% interest in Adjusted Cash From Operations; and

              Fourth, the remainder,  85% to the Limited Partners and 15% to the
      General Partners.

Dissolution.
------------

      Since it is the intention of the Managing General Partner to liquidate the
Partnership's  assets  between  the tenth and  fifteenth  years  after the final
closing date (the "Final Closing Date"), the Managing General Partner will adopt
the  following  procedures to provide for an orderly  liquidation:  the Managing
General Partner intends to confine the  Partnership's  investment  activities to
Mortgage  Loans with terms ending prior to the end of the tenth  anniversary  of
the Final  Closing Date and will try to sell any property  the  Partnership  has
acquired by  foreclosure or otherwise in an orderly  fashion.  Any such sales to
affiliates  of the  Partnership  or the General  Partners  ("Affiliates")  would
require the  approval of a majority of the  independent  members of the Board of
Directors of the Managing General Partner. To the extent that any Mortgage Loans
will not mature by their  terms prior to the end of such tenth  anniversary,  it
may become necessary to sell such investments.  It can be reasonably anticipated
that the  Partnership  may be  required to sell such  investments  for less than
their  outstanding  principal  balances as of the date of sale. The  Partnership
intends to reinvest  loan  proceeds  received  only as and if necessary to avoid
classification  as an  investment  company under the  Investment  Company Act of
1940. See
                                       11
<PAGE>
"Item 6.  Management's  Discussion and Analysis or Plan of Operation"  regarding
possible reinvestment of mortgage loan proceeds.

      Proceeds  from the  liquidation  will be applied  and  distributed  in the
following order:

              First,  to  the  payment  of  creditors  of  the  Partnership  but
              excluding  secured  creditors whose obligations will be assumed or
              otherwise  transferred on the  liquidation of Partnership  assets;
              and

              Second,  after  allowance for the expenses of liquidation  and the
              setting up of any  reserves for  contingencies  which the Managing
              General Partner considers  necessary,  to the General Partners and
              Limited  Partners  in  proportion  to  and to  the  extent  of the
              positive balances in their capital  accounts,  after net income or
              loss  arising  from a  Disposition  has been  allocated,  with any
              excess being  distributed in accordance with the order of priority
              for non-liquidating distributions.

      Notwithstanding anything to the contrary, the Managing General Partner has
the  right to defer  liquidation  if, in the  opinion  of the  Managing  General
Partner,  the sale of  Partnership  assets  in  liquidation  would  result  in a
material underrealization on the Partnership's assets.





                                       12
<PAGE>
Item 2.       Description of Property.

The Partnership did not own any real property as of December 31, 1997.

Item 3.       Legal Proceedings.

The Partnership is not a party to any material legal proceedings.

Item 4.       Submission of Matters to a Vote of Security Holders.

No matters were submitted to a vote of security  holders during the last quarter
of 1997.

                                       13

<PAGE>
                                     PART II

Item 5.        Market  for Units of Limited  Partnership  Interest  and  Related
               Security Holder Matters.

      The units of limited  partnership  interest  (the "Units") are not readily
transferable.  There is no public  market for the Units and it is not  currently
expected that any will develop.  There are restrictions upon the transferability
of Units,  including the requirement  that the General  Partners  consent to any
transferee  becoming a substituted  Unit holder (which consent may be granted or
withheld  at  the  sole  discretion  of  the  General  Partners).  In  addition,
restrictions on transfer may be imposed under state securities laws.

      The  Revenue  Act of 1987  contains  provisions  which may have an adverse
impact  on  investors  in  certain   "publicly  traded   partnerships."  If  the
Partnership  were to be classified as a "publicly  traded  partnership,"  income
attributable  to the Units would be  characterized  as portfolio  income and the
gross  income  attributable  to Units  acquired  by  tax-exempt  entities  after
December 17, 1987 would be unrelated  business income,  with the result that the
Units could be less marketable.  The General  Partners will, if necessary,  take
appropriate  steps to ensure that the Partnership will not be deemed a "publicly
traded partnership."

      At March 31, 1998,  522,116 Units were  outstanding,  and were held by 488
holders of record.

      The  Partnership  made  distributions  to Limited  Partners of  $1,222,290
($750,000 as principal  distribution) or $2.34 per Unit during 1997, $482,515 or
$.92 per Unit during 1996,  $403,747 or $.77 per Unit during  1995,  $456,637 or
$.87 per Unit during 1994,  $495,681 or $.95 per Unit during  1993,  $482,561 or
$.93 per Unit during 1992, $270,586 or $.76 per Unit during 1991, and $62,856 or
$.33 per Unit during 1990.

Item 6.       Management's Discussion and Analysis or Plan of Operation.

Liquidity and Capital Resources.

      Common  Goal  Health  Care  Pension  and Income  Fund L.P.  II, a Delaware
limited  partnership  (the  "Partnership"),  was formed to make  mortgage  loans
secured by a mix of first and junior  liens on health  care-related  properties.
The  Partnership  commenced  its  offering of Units to the public on January 12,
1990,  authorized  to sell up to  1,000,000  Units at $10 per Unit.  Total gross
offering proceeds raised were $5,221,160.  The Partnership  commenced operations
on July 2, 1990 after  having sold the  Minimum  Number of Units.  The  offering
terminated  on January 11,  1992.  As of December 31, 1997,  all  available  Net
Offering  Proceeds  have been  invested  in  Mortgage  Loans  and/or  short-term
investments in accordance with  Partnership  guidelines.  The General Partner is
currently evaluating the possibilities of additional investment opportunities.

                                       14
<PAGE>
      As of December  31, 1997,  the  Partnership  had made six  Mortgage  Loans
directly  or  through a joint  venture.  The  three  Mortgage  Loans  previously
characterized  as  investments  in  the  underlying   properties  for  financial
accounting  purposes  were paid off in April 1995 and  replaced by five  smaller
Mortgage   Loans  to  various  St.   Catherine's   Facilities,   which  are  not
characterized  as  investments  in  the  underlying   properties  for  financial
accounting purposes.

      The  placement  of  available  Net  Offering  Proceeds  in  Mortgage  Loan
investments  should  result  in higher  returns  than are  earned  on  temporary
investments.  The Mortgage  Loans pay Basic  Interest which is payable at higher
rates than are being earned on temporary investments and provide for payments of
Additional Interest and  Participations.  The interest derived from the Mortgage
Loans  and  repayments  of  Mortgage  Loans  contribute  to  the   Partnership's
liquidity.  These  funds  are used to make  cash  distributions  to the  Limited
Partners,  to pay normal  operating  expenses  as they arise and, in the case of
repayment  proceeds,  may,  subject  to  certain  exceptions,  be  used  to make
additional  Mortgage  Loans.  The  movement  of  funds  from  Mortgage  Loans to
short-term  investments has increased the Partnership's  overall liquidity,  but
has lowered  expected  interest  income.  The  Partnership  has  structured  its
Mortgage  Loans to provide for  payment of  quarterly  distributions  to Limited
Partners from investment income.

      The Partnership  intends to maintain  initial working capital  reserves of
approximately  2% of gross proceeds of the offering  (approximately  $104,423 at
December 31, 1997),  an amount which is  anticipated to be sufficient to satisfy
liquidity   requirements.   The  Managing  General  Partner,  in  its  continued
monitoring of the level of working capital reserves, had reduced the rate of the
quarterly  distributions to 7.25% per annum for the four quarterly distributions
beginning  October 5, 1994, but returned to 9.25% beginning October 5, 1995. See
"Item  1.  Business"  and the  Notes to the  Financial  Statements  for  further
information regarding the Partnership's Mortgage Loans.

      On  April  13,  1995,  the  St.  Catherine's,  Court  House,  and  Findlay
facilities  refinanced their senior debt and the  Partnership's  mortgage loans.
The outstanding principal and Additional Interest were subsequently paid off.

      The refinancing of the senior debt did not provide sufficient  proceeds to
allow repayment of the Participations owing under the St. Catherine's Washington
Court House and Findlay Loans (the "SC  Participations")  in the total amount of
$840,500.  The SC  Borrowers  repaid  the SC  Participations  through:  (i)  the
issuance of notes in the total  amount of $400,000  bearing an interest  rate of
11.00% per annum (a) maturing on the earlier of the sale of  refinancing  of the
Tiffin, Bloomville, Fostoria, Washington Court House and Findlay Facilities (the
"SC  Facilities")  or the maturity of the senior debt with South Trust  (August,
2000)  and  (b)  cross-  collateralized  by  second  mortgage  liens  on  the SC
Facilities;  and (ii) the issuance of a  contingent  payment  obligation  by St.
Catherine's of Seneca,  Inc. in the amount of $202,500 and a contingent  payment
obligation by St.  Catherine's  Care Centers of Fostoria,  Inc. in the amount of
$238,000 (collectively, the "CPOs").

                                       15
<PAGE>
      In accordance  with FASB  Statement of Standards No. 66,  "Accounting  for
Sales of Real Estate", the $840,500 participation cannot be recognized as income
at this time. The Partnership has recorded $400,000 of the participation amount,
related to the mortgage loan receivable,  as Deferred Revenue,  and the interest
thereon will be recognized as it is earned.  Due to the contingent nature of the
$440,500 in  participation  income due to the partnership  related to the CPO'S,
such  amount  has not  been  recorded  as an asset  of the  Partnership  and the
participation  income and interest  earned on the CPO's will be recognized  only
when received.

      The  Partnership's  balance of cash and cash  equivalents  at December 31,
1997 and December 31, 1996 was $1,647,623 and  $3,464,102,  respectively,  which
consisted of operating cash and working capital  reserves.  The decrease in cash
and cash  equivalents  from December 31, 1996 to December 31, 1997 of $1,816,479
resulted from cash provided by operating activities,  $160,511, net cash used in
investing of 754,700 and net cash used in financing activities, $1,222,290. This
decrease was partially  caused by the net cash  distributed  as dividends to the
limited partners,  $1,222,290  ($2.34 per Unit),  which included $750,000 ($1.44
per Unit) return of capital. Dividend distributions noted as a return of capital
represent those distributions which are in excess of current year earnings. Part
of the expenses for 1995 included  $116,094 paid out in mortgage  placement fees
authorized by the Partnership's  Partnership Agreement. The Agreement authorized
payment of a 3% mortgage placement fee to Common Goal Mortgage Company ("CGMC"),
an affiliate of the General Partners,  in connection with the original placement
of the  Partnership  mortgage loans with the various St.  Catherine's  entities.
CGMC elected to defer the decision of whether to take such fees until  repayment
of such loans.  An aggregate  of  $4,248,841  of loans were  funded,  with their
principal  amounts fully repaid in April 1995,  for which CGMC was entitled to a
mortgage  placement fee of up to $127,468.  As consideration  for immediate cash
payment, CGMC agreed to a fee of $116,094 by the Partnership at the time of such
refinancing,  representing  payment in full of its deferred  mortgage  placement
fee. The decrease in Total Assets is a direct result of net cash  distributed as
a dividend to the limited partners.

      The  Partnership  is  required  to maintain  working  capital  reserves of
approximately 2% of gross proceeds of the offering (approximately $104,423), but
presently has a balance of  $1,647,623  at December 31, 1997.  The proceeds from
the repayments are being retained in working capital pending future  investment.
These  additional  funds are being  invested  per  partnership  guidelines.  The
General  Partner  is  currently   evaluating  the  possibilities  of  additional
investment opportunities.

Results of Operations.

      The  Partnership  commenced  operations July 2, 1990, and funded its first
Mortgage  Loan in  November  of 1990 (see "Item 1.  Description  of  Business" -
"Existing  Mortgage Loans").  As of June 30, 1991, the Partnership had completed
its portfolio of Mortgage Loans.  Accordingly,  the General  Partners expect the
Partnership's earnings to remain relatively constant.

                                       16
<PAGE>
      During the years ended  December  31,  1997,  1996,  1995,  and 1994,  the
Partnership  reported net income (loss) of $293,963,  $181,568,  $1,639,617  and
$(107,184)  based on total  revenues  of  $214,266,  $268,703,  $1,894,333,  and
$12,670,  and total  expenses  of  $79,698,  $87,135,  $254,716,  and  $119,854,
respectively.  The  Partnership's net income (loss) per Limited Partner Unit was
$.41 per Unit in 1997, $.34 per Unit in 1996, $3.06 per Unit in 1995, and $(.20)
per Unit in 1994.  The  increase in net income  (loss) per Unit between 1994 and
1995 was primarily due to interest and gain on sale of  investments in operating
properties received in April 1995 when the properties refinanced their debt. The
Partnership's  distributions  to Limited  Partners  were $2.34 per Unit in 1997,
$.92  per Unit in 1996,  $.77 per Unit in 1995,  and $.87 per Unit in 1994.  The
1997 dividend  distributions to Limited Partners included a return of capital of
$.
 per Unit. The 1996 dividend distributions to Limited Partners included a return
of capital of $.59 per Unit. The 1995 dividend distributions to Limited Partners
did not include a return of capital.  The entire 1994 dividend  distribution  to
Limited  Partners of $.87 per Unit  represented a return of capital.  Also,  all
interest  received  on the  Mortgage  Loans is  currently  being  recognized  as
interest income.

      Most of the cash received as interest  payments in previous  years was not
recognized  as interest  income,  rather it was  recorded as a reduction  of the
related  investments.  Therefore,  when the Partnership received the pay offs on
the  properties,  the  reduction of the related  investment  balances,  caused a
greater amount of the proceeds to be recorded as income in 1995.

      Expenses  decreased  in 1997 by $7,437.  There was a  decrease  of $436 in
professional  fees and a decrease of $7,219 in management fees caused by drop in
mortgage balances being serviced.  Other expenses increased by $218 from 1996 to
1997.

      Additionally,   under  the  terms  of  the  Partnership   agreement,   the
Partnership  is required to reimburse the Managing  General  Partner for certain
operating expenses.  In an effort to maintain the yield to the Limited Partners,
the Managing  General  Partner did not charge the  Partnership for such expenses
through  December 31, 1990. In 1997,  1996, 1995 and 1994, the Managing  General
Partner was reimbursed by the Partnership  for $34,457,  $38,656,  $29,615,  and
$31,543 of these expenses,  respectively.  The Managing General Partner believes
that such  charges  have not  adversely  affected  the current  yield to Limited
Partners.

      The  Partnership's  success  and the  resultant  rate of return to Limited
Partners  will be  dependent  upon,  among other  things,  (a) the result of the
Refinancing and the terms of the repayment of the St.  Catherine's,  Court House
and Findlay Loans,  (b) the ability of the Managing  General Partner to identify
suitable  opportunities  for the  Partnership to reinvest its assets and (c) the
ability of the borrowers to pay the current  interest,  additional  interest and
principal of the Mortgage Loans.

Item 7.       Financial Statements.

See Financial Statements.
                                       17
<PAGE>
Item 8.       Changes in and Disagreements with Accountants on Accounting and 
              Financial Disclosure.
None.

                                    PART III

Item 9.       Directors, Executive Officers, Promoters and Control Persons, 
              Compliance with Section 16(a) of the Exchange Act.

      The  Partnership  does not have directors or officers.  The following is a
list of the officers and directors of the Managing  General  Partner as of March
31, 1998:

   Name                           Age   Position
   ----                           ---   --------

   Albert E. Jenkins III          51     Chairman of the Board, Chief Executive
                                         Officer, President and Director

   Richard R. Wood                75     Secretary and Treasurer

   William E. Jasper              82     Director

   Rev. Terry A. Steinhauer Sr.   41     Director

   Linda R. Robison               51     Director

     Albert E. Jenkins III is the President and Chief  Executive  Officer of the
Managing  General  Partner and Common Goal Mortgage  Company.  Mr.  Jenkins also
serves on the boards of  directors  of the  above-referenced  corporations.  Mr.
Jenkins is a  co-general  partner of Common  Goal  Limited  Partnership  II, the
Associate  General  Partner,  and Common Goal Management  Company.  In 1986, Mr.
Jenkins formed Common Goal Capital Group,  Inc. to act as the corporate  general
partner of Common Goal I. That partnership  successfully raised $19,129,110 from
1,533  investors  and  placed  seven  mortgages  in  six  states  secured  by 13
facilities.  Mr.  Jenkins  is also  President,  Chief  Executive  Officer  and a
director  of St  Catherine's  of Seneca,  Inc.,  St  Catherine's  Care Center of
Tiffin, Inc., St Catherine's Care Center of Bloomville, Inc. and St. Catherine's
Care  Centers of  Fostoria,  Inc. In addition,  Mr.  Jenkins is President  and a
director of St. Catherine's  Health Care Management,  Inc., St. Catherine's Care
Center of  Washington  Court  House,  Inc.  and St  Catherine's  Care  Center of
Findlay,  Inc.  He is also  president  and  sole  director  and  shareholder  of
HealthCare  Securities,  Inc.  which  served  as the  Managing  Dealer  for  the
distribution  of limited  partner  interests.  Mr.  Jenkins  has been a licensed
securities  salesman since 1971 and an investment  advisor  registered under the
Investment Advisers Act of 1940 since 1978.

     William E. Jasper,  Jr. is a director of Common Goal Capital Group, Inc. II
and has been a member  of the  Board of  Directors  of  Madison  Square  Federal
Savings Bank since 1964.  Prior to 1980, when Mr. Jasper retired,  he had served
as president of a multi-line insurance agency

                                       18
<PAGE>
and  brokerage.  Mr.  Jasper  is a  Deputy  Regional  Director  for a  fraternal
organization  that is dedicated to the Maryland  Special Olympics which provides
health-care  training and specialized sports for the mentally  handicapped.  Mr.
Jasper attended  Baltimore City College and has taken numerous  extended courses
at Loyola  College and Johns  Hopkins  University  in real  estate,  appraisals,
inspections, financial planning, mortgages and management.

     Richard R. Wood, is a general partner of Common Goal Limited Partnership II
and a former director and officer of the Managing General  Partner.  Mr. Wood is
also a director of Common Goal  Capital  Group,  Inc.  and a general  partner of
Common Goal Limited  Partnership I, which is a general partner of Common Goal I,
a publicly-held  limited  partnership with investment  objectives  substantially
identical  to those of the  Partnership,  each of which was formed in 1986.  Mr.
Wood is president,  a director and owner, along with his brother R. Norman Wood,
of Renwood  Properties,  Inc. Mr. Wood has, either individually or together with
or through  Renwood,  sponsored  thirty-one  prior private limited  partnerships
which have acquired real estate.  These  partnerships have raised  approximately
$30,762,525,   with   approximately   81%  of  the  properties   acquired  being
government-subsidized  low income housing  projects for families and the elderly
and  handicapped.  In addition,  Mr. Wood is also a controlling  shareholder  of
Renwood,  Inc.  and several of the Renwood  companies,  which act as  co-general
partners of certain of the  above-referenced  syndications.  Mr. Wood received a
B.A.  from Harvard  University in 1943 and attended  Massachusetts  Institute of
Technology from 1947-1948.

     Rev.  Terry A.  Steinhauer  Sr. is a director of Common Goal Capital Group,
Inc. II. He is the founder and Senior  Pastor of Fostoria  New  Covenant  Church
Inc. an independent  congregation established in 1984. He is a duly ordained and
licensed minister with the State of Ohio. Rev.  Steinhauer is also the president
of the board of directors for the Fostoria Bureau of Concern,  a referral agency
affiliated  with the Red Cross,  United Way, Senior  Citizens  Center,  Meals on
Wheels,  Sharing Kitchen and Habitat for Humanity. He is also a board member for
Bettsville Local School District where he serves as the Legislative  Liaison for
the Ohio School Boards  Association,  in addition to the Technology and Strategy
Planning  Committees.  Rev. Steinhauer is also a member and former editor of the
Northwest Ohio Christian  Writer's  Group.  He is also presently a member of the
Advisory  Board  of St.  Catherine's  of  Fostoria  where  is  has  consistently
ministered  for the last 19 years.  He is a member of the  Fostoria  Chamber  of
Commerce  and  has  been  actively  involved  with  the  Gideons,  the  Fostoria
Ministerial  Association,  Habitat for Humanity,  and the Fostoria Framework for
Progress Committee.

     Linda R. Robison,  is a director of Common Goal Capital Group, Inc. II. Ms.
Robison  is an  attorney  and  practices  primarily  in the  areas of  corporate
transactions,  corporate  finance,  tax,  estate  planning and real estate.  She
represents such industries as manufacturing,  health care, construction, retail,
distribution, and computer software. Ms. Robison has been admitted to the Bar in
Massachusetts,  Illinois,  and  Florida.  She is a member  of the  American  Bar
Association,  and the U.S. Tax Court,  and past chair of the ABA Small  Business
Committee's  subcommittee  on corporate  tax. She has published  articles in the
Practical   Tax   Lawyer,   Securities   &   Commodities   Regulation,   Smith's
Review-Federal,  Estate and Gift Taxation,  Taxation for Lawyers,  and a Matthew
Bender treatise on real estate transactions. She earned her

                                       19
<PAGE>
undergraduate degree from the University of Georgia where she attained a B.S. in
psychology and graduated cum laude and Phi Beta Kappa.  Ms. Robison has a L.L.M.
in taxation  from  Boston  University.  She is a  co-founder  and  director of a
wholesaler of sportswear, and a co-founder and director of a firm which finishes
plastic parts for the computer and automotive industries.  From 1983 to 1990 she
was a Partner and Board  Member of the Chicago  based firm of Sachnoff & Weaver.
She  is  the  immediate  Past-President  and  Chairman  of  U.S.  Committee  for
UNICEF/Chicago;  a past  President  and  Board  Member  of the  Chicago  Finance
Exchange;  and the Treasurer and Board Member of Chicago Midwest Women's Center.
In addition she has served on the Advisory Board of YMCA;  Board Member of Women
in Management and a member of Business and Professional Women's Board.

                                       20
<PAGE>
Item 10.      Executive Compensation.

      The Partnership has no executive officers or directors. The Partnership is
not  required to pay the  officers  and  directors  of the General  Partners any
current  nor  any  proposed  compensation  in  such  capacities.   However,  the
Partnership is required to pay certain fees, make  distributions  and allocate a
share of the profits or losses of the  Partnership  to the  General  Partners as
described under the caption  "Management  Compensation" on pages 8 through 11 of
the  Partnership's  Prospectus,  which  description  is  incorporated  herein by
reference.  Set forth below are the fees,  compensation and other reimbursements
paid or accrued to the Managing  General Partner and its Affiliates for the year
ended December 31, 1997.

                                  Capacities in
                                Which Compensation
Name of Affiliate                 was Received                    Remuneration
-----------------                 ------------                    ------------

Managing General Partner           Management fee                    $29,031


Common Goal Mortgage               Mortgage loan                     $ 1,126
Company                            servicing fees

________________________

No form of non-cash remuneration was paid by the Partnership.

For further  information on compensation paid to Common Goal and its Affiliates,
see "Management Compensation" on pages 8-11 of the Prospectus.

Item 11.      Security Ownership of Certain Beneficial Owners and Management.

      The  Partnership,  as an entity,  does not have any directors or officers.
The following is information concerning Unit ownership as of March 31, 1998.

      To the best knowledge of the  Partnership,  no person owns more than 5% of
the  outstanding  Units.  Messrs.  Jenkins and Wood each own less than 1% of the
total  outstanding  Units and all officers and directors of the Managing General
Partner,  as a group, own less than 1% of the total outstanding  Units. No other
officer or director of the Managing General Partner owns any Units.

Item 12.      Certain Relationships and Related Transactions.

      The Partnership made and funded three Mortgage Loans (the St.  Catherine's
Loan,  the Court House Loan and the Findlay  Loan) to  affiliated  entities.  In
connection with these Mortgage Loans, the Partnership obtained the opinion of an
independent third party that the

                                       21
<PAGE>
terms and conditions of the respective loans were fair and at least as favorable
to the Partnership as a loan to an unaffiliated party in similar  circumstances.
See  "Management's  Discussion  and Analysis or Plan of  Operation"  for further
information regarding the repayment and refinancing of these Mortgage Loans. The
Partnership has made an additional loan to an unaffiliated party through a joint
venture with Common Goal I, an affiliated,  publicly-offered limited partnership
with  similar  investment  objectives  (the Joint  Venture  Loan).  For  further
information  concerning  those  Mortgage  Loans,  see  "Item 1.  Description  of
Business."

     The Partnership  engages the services of Common Goal Mortgage  Company,  an
affiliate of the General Partners,  in connection with servicing  Mortgage Loans
for which Common Goal Mortgage Company  generally is paid a fee by the borrower.
See "Item 10. Executive Compensation," for the information concerning such fees.




                                       22

<PAGE>
                                     PART IV

Item 13.      Exhibits and Reports on Form 8-K.

      (a)     (1) Financial Statements

              The response to this portion of Item 13 is submitted as a separate
              section of this report, commencing on page F-1.

              (2) Financial Statement Schedules

              Not applicable.

              (3) Exhibits

              See response to Item (c), below.

      (b)     Reports on Form 8-K

              The  Partnership  did not file any  reports on Form 8-K during the
              quarter ended December 31, 1997.

      (c)     Exhibits

      The following exhibits are included herein or incorporated by reference:

      Number

      3           (a) Amended and  Restated  Limited  Partnership  Agreement  of
                  Registrant  dated as of  December  6,  1989  (incorporated  by
                  reference from Exhibit 3.1, included in Registrant's Form S-11
                  Registration Statement S.E.C. File No.
                  33-31358).

      3           (b) Pages  8-11 of the  Registrant's  final  Prospectus  dated
                  January 12, 1990,  as filed with the  Securities  and Exchange
                  Commission pursuant to Rule 424(b) under the Securities Act of
                  1933, as amended.

      (d)     Financial Statement Schedules

              Not applicable.

                                       23
<PAGE>
                                   SIGNATURES
                                   ----------

      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                              COMMON GOAL HEALTH CARE PENSION AND
                              INCOME FUND L.P. II

                              By:      Common Goal Capital Group, Inc., II,
                                       General Partner

                              By:      /s/ Albert E. Jenkins
                                       ------------------------------
                                       Albert E. Jenkins III
                                       Chairman and Chief Executive Officer
Date: March 31, 1998

      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

      Name                          Position                  Date

/s/ Albert E. Jenkins             
---------------------               Chairman (Principal       March 31, 1998
Albert E. Jenkins III                 Executive Officer),
                                      President, Principal
                                      Financial and
                                      Accounting Officer
                                      and Director of
                                      Managing General
                                      Partner

/s/ William E. Jasper, Jr.          Director of Managing      March 31, 1998
--------------------------
William E. Jasper, Jr.                General Partner

/s/ Richard R. Wood       
-------------------                 Director of Managing      March 31, 1998
Richard R. Wood                       General Partner

/s/ Terry Steinhauer                Director of Managing      March 31, 1998
--------------------
Terry Steinhauer                      General Partner

/s/ Linda Robison                   Director of Managing      March 31, 1998
-----------------
Linda Robison                General Partner
(A Majority of the Board of Directors of the Managing General
Partner)

<PAGE>
COMMON GOAL HEALTH CARE
PENSION AND INCOME FUND L.P. II
(a Delaware limited partnership)
<TABLE>
<CAPTION>
Balance Sheets

December 31, 1997 and 1996
--------------------------------------------------------------------------------

                                                      1997                1996
                                                      ----                ----
Assets                                            (Unaudited)
------                                        
<S>                                                <C>                   <C>      
Cash and cash equivalents                          $1,647,623            3,464,102
Accrued interest receivable                            76,864               11,088
Due from affiliates                                     3,517                2,205
Mortgage loans receivable                           1,205,290              450,590
                                                   ----------          -----------

                                                   $2,933,294            3,927,985
                                                   ==========           ==========
Liabilities and Partners' Capital
---------------------------------

Accrued expenses                                $         -                      -
Due to affiliates                                      13,334                    -
Deferred revenue                                      400,000              400,000
                                                  -----------          -----------
        Total liabilities                             413,334              400,000

Partners' capital
     General partners                                  39,123               34,838
     Limited partners                               2,480,837            3,493,147
                                                  -----------          -----------
        Total partners' capital                     2,519,960            3,527,985
                                                  -----------          -----------
Commitments and contingencies (note 3)

                                                   $2,933,294            3,927,985
                                                   ==========           ==========
</TABLE>



                                       F-2
<PAGE>
COMMON GOAL HEALTH CARE
PENSION AND INCOME FUND L.P. II
(a Delaware limited partnership)
<TABLE>
<CAPTION>
Statements of Operations

Years ended December 31, 1997, 1996 and 1995
--------------------------------------------------------------------------------

                                                                   1997            1996             1995
                                                                   ----            ----             ----
                                                               (Unaudited)
<S>                                                             <C>               <C>             <C>    
Revenues:
     Interest income                                            $ 293,963         268,703         261,614
     Gain on sale of investments in operating properties                -               -       1,632,719
                                                             ------------     -----------      ----------
                                                                  293,963         268,703       1,894,333
Expenses:
     Professional fees                                             20,269          20,705          51,233
     Fees to affiliates:
        Management                                                 29,031          36,250          52,212
        Mortgage servicing                                          1,126           1,126           4,020
        Mortgage placement fee                                          -               -         116,094
     Other                                                         29,272          29,054          31,157
                                                               ----------     -----------      ----------
                                                                   79,698          87,135         254,716
                                                               ----------     -----------      ----------

            Net income (loss)                                     214,265         181,568       1,639,617
                                                               ==========      ==========      ==========

            Net income allocated to general partners           $    4,285           4,539          40,990
            Net income allocated to limited partners              209,980         177,029       1,598,627
                                                                ---------     -----------      ----------
                                                                  214,265         181,568       1,639,617
                                                                =========     ===========      ==========

            Net income (loss) per limited partner unit               $.41              .34           3.06
                                                               ==========     ============   ============

            Weighted average limited partner units
                outstanding                                       522,116         522,116         522,116
                                                               ==========     ===========      ==========
</TABLE>

                                       F-3
<PAGE>
COMMON GOAL HEALTH CARE
PENSION AND INCOME FUND L.P. II
(a Delaware limited partnership)
<TABLE>
<CAPTION>
Statements of Partners' Capital

Years ended December 31, 1997, 1996 and 1995
--------------------------------------------------------------------------------
                                                                                            Total
                                                             General         Limited      Partners'
                                                            partners        partners       capital


<S>                                                       <C>            <C>            <C>      
Balance at December 31, 1995                                 $30,299        3,798,633      3,828,932

Net income                                                     4,539          177,029        181,568

Distributions to limited partners
     ($.92 per unit)                                               -        (482,515)       (482,515)
                                                          -----------      ----------      ----------

Balance at December 31, 1996                                 $34,838       3,493,147       3,527,985

Net income

Principal distributions to limited partners                    4,285         209,980         214,265

Principal distributions to limited partners                         -       (750,000)       (750,000)

Distributions to limited partners ($.90 per unit)                   -       (472,290)       (472,290)
                                                           ----------      ----------      ----------

Balance at December 31, 1997 (Unaudited)                      $39,123      2,480,837       2,519,960
</TABLE>

                                                        F-4